The revised draft National Policy Statements on energy - Energy and Climate Change Contents

Examination of Witnesses (Questions 1-123)

Charles Hendry MP. Hergen Haye. Anne Stuart

30 November 2010

  Q1 Chair: Minister, good afternoon and welcome to this session. We are glad to have you back again. As you know, a couple of members of the Committee were colleagues of yours on this Committee during the previous Parliament. They have promised to remind you of all the things that you said then, and to see if there is any compatibility with what you are going to say this afternoon.

  May I begin by drawing attention to my entry in the Register of Members' Financial Interests? I have an interest in a company that is involved in renewable energy.

  Could I ask you just to take us through the informal ratification process so that we understand exactly how it is going to work?

  Charles Hendry: Parliamentary ratification?

  Chair: Yes.

  Charles Hendry: First, perhaps I can say that I am joined by Hergen Haye, who is head of new nuclear in the Department, and by Anne Stuart, who is head of planning reform. I hope it will be acceptable to the Committee for them to join in on some of the answers, especially where my comments are not entirely consistent with what I might have said in my previous life. I think that we have a smooth transition across there to ensure that we have a consistent picture.

  In terms of the process that we are looking at now, there is a three-month consultation taking place on the national policy statement. We took a view that we ought to go through a formal re-consultation. It was pointed out to us that the appraisal of sustainability was not as clear and as forceful as it needed to be. We agreed with that representation, and, as that was in the overarching national policy statement on energy, we decided it was sensible to re-consult on all of them—all the six individual ones as well. Therefore, people can have a chance to see how we've reacted to the initial round of consultation, which ends on 24 January. There is then a need to put this through Parliament formally. In terms of the technicality, we have committed to there being a parliamentary vote. Under the old legislation, that would not be binding, but we have said that the Government would be bound by it, because that is a change that we intend to make in due course.

  Q2 Chair: Do we get the chance to vote individually? Will we actually vote on the energy NPS?

  Charles Hendry: You'll vote on each of the six NPSs. You will have a chance to vote individually on them, but my understanding at this point is that it will be an unamendable motion. You will be able to vote in favour of or against each individual NPS.

  Q3 Chair: Are there individual debates, or is it one debate on all the NPSs and we just get up and say what we think about them?

  Charles Hendry: I think the Committee would have a chance to feed into that structure. No firm decision has been made. If you thought it would be important to be able to discuss them individually, I think that the Committee could make its views known to the Leader of the House. We have chosen to follow up on the advice of the previous Committee, and that is why we have a debate tomorrow to give other Members of the House a chance to have their views heard.

  Q4 Sir Robert Smith: Why have the Government rejected the concept of an amendable motion, under which the House could express its views through amendments? It might not want to reject the whole NPS, but may see a flaw in it.

  Charles Hendry: Looking at the complexity of it, perhaps a formal amendment could be accepted by Mr Speaker. But what would be difficult in the planned structure would be to allow, as in the Committee stage of a Bill, potentially many hundreds of amendments to be considered. There cannot be amendment in detail, but if people choose to put down amendments, it will be up to Mr Speaker to decide whether to accept them.

  Q5 Chair: The actual process of ratification is set out in the localism Bill.

  Charles Hendry: It will be.

  Q6 Chair: Are we likely to have the benefit of seeing that before we have these debates?

  Charles Hendry: Yes, my expectation is that we will. Anne, you might wish to comment further.

  Anne Stuart: It is actually my colleagues in the Department for Communities and Local Government who are producing it, but I know they are working very hard to do so very soon, so I would hope that we would have it before the end of our consultation.

  Chair: Okay. That's encouraging.

  Q7 Albert Owen: May I just take up the theme that you're developing, Chair? I'm a little bit confused. We will have the localism Bill and the Department for Communities and Local Government, but will we see your good self and other members of the DECC team when we're talking about the energy policy statements?

  Charles Hendry: My expectation is that it would be the DECC team that would take the energy policy statement through the process in the House. As we have said, the law will not, at that point, have been changed to require a parliamentary vote on the matter, so we are doing this essentially as a matter of the Government saying, "As this will be the policy we expect in due course, if the legislation goes through, we'd like to give colleagues a chance to vote on it at this point." My expectation is that it will be us leading it, because, in terms of the nature of the debate, I think that people—

  Q8 Albert Owen: Following that logic, we are going to have a couple of days' debate on each NPS.

  Charles Hendry: I think you would have a couple of days' debate on the energy NPSs, perhaps, rather than on each individual NPS, but that is essentially a matter for the business managers, rather than for us directly. It is for them to see how best they can ensure that colleagues have a chance to have their opinions heard.

  Q9 Albert Owen: May I move on to the changes to the Planning Act 2008? I know that we've had these conversations in other debates before, but why did you think that it was necessary to abolish the IPC and replace it with the MIPU?

  Charles Hendry: We felt that the nature of the IPC did not have sufficient parliamentary scrutiny and democratic accountability. As a part of that process of localism and of ensuring that people's views were heard, we took a view that the back-office function should continue as before—it would therefore be part of the MIPU within the Planning Inspectorate—but that the final recommendations should go to Ministers. We believe that that means that people can question Ministers more effectively. They can be called before Select Committees. They are acting in a sort of quasi-judicial capacity, but there is a greater degree of democratic accountability. We believe that that makes the whole process more robust and, in terms of the potential legal challenges that might come through, we think that if we have gone through that process, we will ensure that the decisions are more robust.

  Q10 Albert Owen: I understand the democratic argument and that an elected Minister of the Crown will make a decision. What I do not understand is what you said about localism, because London is hardly local to people in the north-east of England or the north-west of Wales. I do not understand the localism element there. Are you suggesting that the Minister would literally listen to the views of that locality when a particular project had been put forward for that area?

  Charles Hendry: The views of that locality will be a relevant planning matter, but the Member of Parliament for that area has the opportunity to question the Minister. Making sure that the views of local people are represented in that process is done, at the moment, through the Select Committee, which is the only opportunity that people have. Clearly, your own constituents would have a chance to be heard but, for most of the other nuclear sites, they would not have the same chance to be heard. We believe that the process that we are going through therefore allows local opinion to be taken into account more effectively and thoroughly.

  Q11 Albert Owen: I understand the theory, but when the IPC was set up—I know nothing has come forward—there were local meetings and local information from DECC and BIS. As a local MP, I have already been involved in that. Although I do not take the decisions, I have already been involved, so I do not understand the difference.

  Charles Hendry: It is a different stage of the process, because fundamentally the point where we are making the difference is after the internal assessment has been carried out and a recommendation is made. Under the current process, which was set in place by the previous Government, the IPC would make the decision as an independent committee, but that was not subject to parliamentary scrutiny. The change we will make is that that decision will be made by the Secretary of State, who can be scrutinised by Parliament. It is at a different stage of the process where we will continue to encourage and hear local views.

  Q12 Albert Owen: Have you made any estimates of the costs to abolish the previous regime, operated by the Labour Government, of the IPC and to move to the new one?

  Charles Hendry: In some areas there will be savings from that. In terms of the work, the recommendation will be carried across the Department. We believe that, with our existing resources, we can scrutinise that to make a final decision. At that point, some of the overheads will be reduced. Anne, you have carried out more detailed assessment of that work.

  Anne Stuart: CLG colleagues are carrying out that sort of work as part of the preparations for the localism Bill, because obviously it will be part of their impact assessment, but I do not have the figures yet.

  Q13 Albert Owen: But Minister, you're saying that there could be some savings. Is that your position?

  Charles Hendry: Absolutely, but the policy is not driven by a desire to make savings; it is driven by having a more thorough and robust process.

  Q14 Albert Owen: It is not a trick question. Will costs be incurred by moving from one regime to another?

  Charles Hendry: In terms of the transition, we believe not, because together with DCLG we are looking at a very smooth transition process. There should not be a hiatus in decisions being made and there should not be a transition cost involved in that process. In terms of a fuller answer, it would clearly be DCLG that has done the most detailed work.

  Q15 Albert Owen: You talk about the transition period. Is it your view and your Department's that the transition might cause delays in projects moving forward and could have an impact on investment in the future?

  Charles Hendry: The expectation is that there will be a time constraint on the process, which could be very similar to that which is currently in place under the existing IPC system. Again, that is a DCLG lead. It is finalising its recommendations in that respect and also looking at the transitional elements, because we are very keen to reassure investors that there will not be delays as a result of the transition process. DCLG will set out the final detail on that as part of the localism Bill.

  Q16 Albert Owen: Do you not accept that when we moved from the previous regime to the IPC, there was a lack of projects coming forward, which was to do with a new system being set up? Isn't that likely to happen again?

  Hergen Haye: Not really, because it has been clearly set out that any application that comes forward now will be considered by the IPC, as long as the IPC continues to exist. At the stage when the IPC is abolished through the localism Bill, such an application will transfer to the new body and to the Secretary of State for final consideration. It is clearly put out by CLG that the aspects that have already been completed will not be undertaken again. Anyone who puts in an application now can have confidence that that work is not wasted.

  Q17 Albert Owen: But you do accept that there were delays before—that things were kept on hold when there was the change to the IPC.

  Anne Stuart: I don't think that we've got any evidence that people were holding things up. If anything, there was a slight bulge of applications just before, which is what caused the dip afterwards. Developers had an attack of "better the devil you know," and put in their applications quickly, and therefore there was less to come through in the first months of the IPC.

  Q18 Albert Owen: Moving on to the decision making and the role of the Secretary of State in this, are we talking about the Secretary of State for Communities and Local Government making the decisions or, in the case of nuclear power stations or CCS, are we talking about the Secretary of State for Energy?

  Charles Hendry: A final decision is still to be made on which will be the appropriate Secretary of State, and that will be set out in the Bill.

  Q19 Albert Owen: But don't you think that that's fundamental, and that it shouldn't be something that you're waiting for? If the energy industry wants to invest, it really needs to know who's going to make that decision.

  Charles Hendry: And it will do. The localism Bill will set out exactly that detail, but it would be wrong to start chipping away at elements of that Bill. If parts of it were set out at this stage people would say, "Okay, you've told us that; would you now clarify this? If not, why not?" Part of the nature of government is that it is sensible to package elements together so that people see the full picture. At that point, it will be absolutely clear which Ministers will be making the decisions—it will be in very good time.

  Q20 Albert Owen: As a Welsh Member, I am concerned about that. Local government is devolved in Wales, so if the Communities and Local Government Department was making the decision, you could have a planning department in England making decisions about planning in Wales, whereas now it's pretty clear that developments of less than 50 MW are the responsibility of the National Assembly for Wales and anything over that is the responsibility of the Secretary of State for Energy. That clarity is there now; shouldn't it be carried forward? Isn't that something that DECC could be lobbying on?

  Charles Hendry: There have been representations on both sides of the argument. Some people have said that it would be better if it was done by DCLG, because it has no inherent interest in the outcome, whereas it could be said that DECC as a Department has a vested interest in certain plants being approved. The alternative view is that the relevant Minister who has the greatest policy involvement and understanding of the issues should be the one to do it. So it is exactly those issues, and particularly how they relate to the devolved Governments, that have to be resolved at this point.

  But in terms of the process moving forward, when people come to make an application, this will have been resolved many months beforehand. There will be no doubt in anyone's mind by the time that the IPC eventually goes and our new system is put in place, because the localism Bill setting this out with absolute clarity will by then have become an Act, and therefore that detail will be absolutely clear to people making an application.

  Q21 Albert Owen: Do you envisage the Secretary of State overturning the experts in the unit?

  Charles Hendry: I think that it's right that the Secretary of State brings an independent mind to it and looks at it properly. I think that that's what people would expect the IPC to do, and what they would expect the Secretary of State to do. So, if the Secretary of State feels that there are aspects that were not properly taken into account in a recommendation, I think that it would be entirely proper for the Secretary of State to make that choice.

  Q22 Albert Owen: But would he be influenced by political pressure?

  Charles Hendry: Speaking for the team I know, they would make the decision based on the evidence.

  Albert Owen: We don't even know who's going to make that decision yet—except that it's a Secretary of State.

  Charles Hendry: The system would become discredited if the choice was made under political pressure. It has to be seen to be a thorough and independent process, and that would therefore be a fundamental part of the process moving forward.

  Q23 Albert Owen: I just want a little bit on that. If a Secretary of State makes a decision that the industry's not happy with and, in the spirit of localism, the local community's not happy with it, how will they be able to appeal against it? Has that mechanism been decided?

  Anne Stuart: There is an appeal mechanism in the current Planning Act, so I imagine—I haven't seen the final draft—that there would have to be a parallel equivalent. At present, of course, if a Minister makes a decision, there is an appeal by judicial review—

  Q24 Albert Owen: Is that a likely avenue? If a Secretary of State—a Minister of the Crown—has made a decision, how can that be challenged other than by a judicial review?

  Anne Stuart: I believe that the IPC's decisions could be challenged, but there will be appeal provision built in, which will have to be there because Ministers must be challengeable in case there is some perception that there is a mistake.

  

  Q25 Albert Owen: I have one final question; who else would the Secretary of State consult? He gets the MIPU to give him the report, the recommendation is there and he decides that he needs to consult somebody else, perhaps. Who would that be?

  Charles Hendry: The Secretary of State would be expected to make a decision on the evidence that is submitted to him. Once the process has started, if the Secretary of State decided to consult somebody else, he would also have to consult people on both sides of the equation or that would undoubtedly lead to a greater risk of judicial review of the decision that was made. However, the expectation would be that the recommendation would be made to the Secretary of State, including the reasons, and that would be the basis for the decision that the Secretary of State makes.

  Q26 Sir Robert Smith: Is the Secretary of State acting in isolation, as an individual making that decision and therefore, other Secretaries of State can lobby the Secretary of State on the issue? Or, is it a collective Government decision that is made?

  Anne Stuart: In terms of the localism Bill, I haven't seen anything on that. In general, the Secretary of State acts for the Government when making such decisions.

  Q27 Sir Robert Smith: I'm just trying to pin this down, because it is a sort of quasi-judicial decision.

  Anne Stuart: Normally, when a Minister of any kind is making a decision of this type, which is effectively quasi-judicial, they can listen to people who want to talk to them but they can't give any opinion on the merits or otherwise of the application in front of them, until they have made a decision. I would expect that to be the case, whether it is somebody from industry, a local group, or an MP or a colleague who wants to talk to him about it.

  Charles Hendry: Inevitably, we will be fairly cautious about expressing the view of another Government Department. If it is helpful to the Committee, we can certainly ensure that a Minister from DCLG writes to inform your decisions and thinking in this area. However, I would be cautious about us, at any time, trying to represent that, when it's a policy—

  Chair: There's no need to be cautious in front of us, Minister. We're quite discreet about these things. If you want to express a different view, we would welcome you airing the debate, and the public can listen.

  Q28 Christopher Pincher: My question is similar to what was already asked about the MIPU, and it relates to the NPSs themselves. I appreciate that they are being set up to give business and other players some certainty as to what the policy framework will be for a period of time going forward. As I understand it, the Planning Act places a duty on the Secretary of State to review each NPS whenever the Secretary of State thinks that it is appropriate to do so. I wonder if you could give us some indication of what triggers might encourage a Secretary of State to look at an NPS.

  Charles Hendry: Different elements could affect that. If we look, for example, at the NPS on renewables, we have not included tidal marine technologies because we do not think that there is any likelihood, in the short term, of applications coming through that would be above the 50 MW threshold. However, as that situation hopefully changes, and we start to see some significant tidal applications coming through, either a new NPS will be required or an amendment to the renewables NPS. So, changes in technology will change the situation.

  We have considered what we see to be the energy need up to 2025, and we have identified various elements within that. We are not being specific on individual technologies, but if it's clear that some of those will not be as substantial as we may hope, further reflection will be needed on different ones. Ministers have the ability to look at evidence that comes in and ask whether that requires a change to the NPS.

  Q29 Christopher Pincher: But will example triggers, or a non-exhaustible list of triggers be laid down to give everybody some indication of what you might look at and when you might look to change an NPS? Otherwise, it gives the impression that you can change them at will, or on a whim?

  Hergen Haye: Given the rigorous process an NPS has to go through to get established, there is a presumption that we would like the NPSs to be robust and hold out for quite a considerable period. It is the issues that we don't know about that may present a possibility for the Secretary of State to go back to the NPSs and ask whether the change has any implications for what we have put forward—for example, if, in our progress towards 2025 and 2050 decarbonisation, findings in the annual reports of the CCC suggested that we are not really on target in terms of low-carbon technologies. The presumption is that the NPSs should last for a considerable time.

  Q30 Laura Sandys: I want to move on from that and look at the actual planning process itself. On the one hand, we are saying that the NPSs have a lot of flexibility over a time period, but, on the other hand, they're there to give reassurance for the £200 billion investment that we require. Do you think that they give enough strategic guidance and framework to make such investment decisions both safe and predictable?

  Charles Hendry: One has to look at them as being part of the planning process. They are not part of the decarbonisation process, nor are they part of moving towards a low-carbon economy. They set the framework for major planning decisions. I think that the thoroughness with which they address those issues gives investors a significant amount of security. Investors know which factors may be considered to be material, and which factors will not be considered to be relevant to an application. We have sought to do that in order to give that degree of security and structure. If anything, in the course of the process we have further tightened the NPSs, and we now believe that they are more robust than they were in the initial round of consultation, thanks to the feedback that we received on that consultation process, to try to give as much clarity to investors as possible.

  Q31 Laura Sandys: One of the interesting things is that we have a set of energy NPSs, but we also have other NPSs from different Departments. In many ways this follows on from Albert's point—who has hierarchy? Let me give you an example of that—biomass. Some people, myself included, feel that food security will be an issue in about 30 years' time. Who has hierarchy when we start to look at NPSs? Is, for example, the National Security Council involved in advising different Departments on such competing issues. The Department for Transport, again, has its own NPSs and it will be looking at key strategic issues. Who overrides whom? Again we come back to the question Albert asked. Who ultimately will then be the arbitrator, or make the decisions, on NPSs when there are competing interests?

  Charles Hendry: These are not being worked up by just the Department. They are being worked up in consultation with other Departments, so we are aware of what the Department for Transport is working on, and it is aware of what we are working on. There should be no inconsistency and no conflict between the National Policy Statements in those areas. If there is, clearly we would wish to address that and the Government would have to establish which NPS has precedence.

  Biomass is an example of where the Government and the Department itself would have precedence, because on biomass it would not be the job of the IPC to look at issues of sustainability. The Government would determine sustainability for biomass. In the new year we will be setting out what we believe are the appropriate sustainability criteria for biomass in terms of land diversion and the source of crops, and we will ensure that they meet our standards. That will not be part of the IPC process.

  Q32 Laura Sandys: Taking that forward—you're looking at very long term investments—are you working closely with the Horizon group in BIS on some of the issues that it is looking at at the moment? The Horizon group is, again, looking at water security, food security and fundamental changes that are covered by the other responsibility of your Department—climate change—and how those will affect both these statements and the outcomes of these statements.

  Charles Hendry: The thing that has impressed me most about being a Minister is the extent to which there is co-ordination between Departments. We work extremely closely with BIS, DEFRA and all other Departments on those matters. We are looking to ensure that, when we reach a decision on sustainability, every Department that has an interest in that area will have been consulted on the way forward and agreed to it. If there isn't agreement between the Departments, it will have to go through a clearing process at the Cabinet Office. We try to make sure that, wherever there is a potential conflict between the ambitions of different Departments, it is sorted out through that process.

  Laura Sandys: I think that clearing process is quite interesting from the point of view of how one goes forward.

  Q33 Sir Robert Smith: On the biomass issue—I suppose it comes back to the tension with which the Committee grappled last time—those are planning guidelines for planning use, but other instruments and levers of Government will be there to control other agendas, such as the carbon content. How are the Government planning to ensure that biomass is sustainable? Is it through the financial incentive or through actual regulation?

  Charles Hendry: It would be through actual regulation and saying that, in order to qualify for a renewable obligation certificate, it must meet certain criteria for sustainability. Without being able to get the ROC support, clearly the investment would not go ahead in any case.

  Q34 John Robertson: Moving on a wee bit, how do the new appraisals of sustainability fulfil the requirements of the SEA directive?

  Charles Hendry: We have sought to be more robust. Hergen, perhaps you can give some more precise detail about it, but we have looked at what was written initially and have agreed that that was not as clear and as forceful as it needed to be. Hergen, perhaps you can clarify further.

  Hergen Haye: The issue was the appraisal of sustainability for the overarching energy national policy statement in EN-1 to EN-5. There was quite a robust AOS for the nuclear one already in place, which was probably helped because we had specific sites already in view with nuclear. But it was felt that the overarching appraisal of sustainability didn't adequately deal with a proper assessment of alternatives to the policies we were putting forward. That robustness was, frankly, lacking and, on advice, we decided to undertake that assessment for the overarching energy NPS and EN-1 to EN-5. The result is being published in this revised suite of documents.

  Q35 John Robertson: What new data will be required to monitor the implementation of the NPS?

  Anne Stuart: Sorry, I'm not quite sure that I follow.

  John Robertson: You've just said that there is going to be a different way of monitoring and looking at it, so you must be looking at it in a different way.

  Hergen Haye: I didn't say a different way to monitor. When we assessed the policies that we put forward, we didn't really evaluate other options or alternatives to the proposals that we put forward. In a robust appraisal of sustainability, you should also consider alternative possibilities and options. That is the work we have undertaken. In many ways, the conclusions to our policy haven't changed, but they are now more robust because we can show and demonstrate in a transparent way that we have actually assessed the alternatives.

  Anne Stuart: In our previous assessment, the alternatives were based on the assumption that, because—as I am sure you are aware—we had written the national policy statements to reflect existing policy, we originally thought that we couldn't think of alternatives to policy, because they weren't in the gift of NPSs themselves. When we went back, we actually looked at those alternatives to policy and assessed the impacts of alternative policies.

  Q36 John Robertson: So will the Government produce the guidance to assist Departments in the future production of NPSs?

  Anne Stuart: The purpose of the appraisal of sustainability that we did was to improve the energy NPSs, and that process went on. I am sure that I am teaching my grandmother to suck eggs, but the SEA, in principle, and the way in which we have done AOSs are an iterative process. You work with the person doing the appraisal to make sure that their results feed back into the documents as they are being written, so the final document already incorporates the outcome.

  The other NPSs that are being written are subject to their own appraisal of sustainability and will undergo the same process. Having said that, we are obviously talking to the other Departments. We have actually been talking about setting up a meeting in which the people who did our appraisal can talk to the people who are doing appraisals for other Departments, so that we can do lessons learned.

  Q37 John Robertson: Does that mean that there is additional monitoring?

  Anne Stuart: For the first time, we have published the monitoring strategy, which is part of the latest suite of documents, because, obviously, you always do a monitoring strategy for any SEA appraisal.

  Q38 John Robertson: Is there a cost in that?

  Anne Stuart: We're aiming to do it as far as possible with existing strategic information. Because the NPSs, with the exception of nuclear, are strategic and non-locational, the AOS is also done at a strategic level. We are therefore aiming to use existing strategic information rather than trying to start doing major new equip.

  Q39 John Robertson: So you're saying that you want to get more with the same? I am trying to work out where the departmental cuts come in and how you are going to manage this.

    Anne Stuart: The monitoring strategy will use the sources of information we already collect. There is a lot of information out there from Government, as everybody knows, and we will use that to appraise the effects of the NPSs themselves—obviously it is not the effect of the appraisal but the effect of the NPSs—and say, "Can we tell whether certain key indicators have changed and do we think those key indicators have changed as a result of NPSs, as opposed to as a result of all the other things?"

  Q40 John Robertson: The table I have in front of me is rather complicated and has the short, medium and long-term appraisal of whether it will be good, bad or indifferent or, as it says here, "positive, negative, neutral or uncertain". On a lot of them we have neutral and uncertain or positive and uncertain. It strikes me that the whole table is uncertain, so why bother putting it out?

  Anne Stuart: Yes, it is uncertain because we don't have details of what the actual sites will be and what the things built on those sites will be. We know there are liable to be, for instance, large and obtrusive things built on the landscape if you are building energy infrastructure because most of it is quite large and obtrusive. So we can say there is a landscape effect. But we cannot be sure whether someone will bring forward, say, a wind farm that they want to build on a peat bog, which would have quite a major impact, or a wind farm that they want to build on a brownfield site, which might have quite a minor impact.

  Q41 John Robertson: I go back to the cost. You are doing the same or more but actually you are going to have to do it with less because of Government cuts.

  Charles Hendry: If you look at the priorities of the Department we recognise that we have to secure £200 billion in new investment in our energy infrastructure. That is right up there at the top of our urgent needs for the Department to do. We recognise that in the course of doing so costs will be incurred in order to attract that investment to the United Kingdom. But that is non-negotiable. That is what we have to do as a Department if we are to guarantee our energy security.

  Q42 John Robertson: I accept that, Minister, and nobody would support you more than I do in relation to investment. But at the end of the day, all these things are at a cost. If we take our eye off the ball at any time and we allow something to progress which should not have been allowed to progress then we will have wasted a great deal of taxpayers' money. My concern is about the monitoring and the cost and what will be required, because you have said you have no idea what may happen in the future. Therefore you are cutting back at a time when maybe you should not be.

  Charles Hendry: In terms of how we make the Department work more efficiently and where we reduce our costs, we are looking across the work of the Department and we will have to prioritise the things that are most important. Energy security and new plant investment is a very high priority for us so we can be certain that that will be continued. We also recognise that much of the costs of this work—the planning costs—are contributed to by the industries looking to invest in that area themselves. The only way to try to address your issue more fundamentally would be for us to say, "We want this number of nuclear power stations, this number of gas power stations, this number of turbines, this amount of biomass", and then it becomes completely prescriptive and a potential nightmare. The one thing that would happen immediately is that the costs of all those technologies would go up because industry would say, "Well, I didn't know you wanted that much. Now you want that much I can't possibly deal with it without having some more support." Our view is that we establish an assessment of need and we recognise that there is a range of different ways in which that can be met.

  Q43 John Robertson: My last comment would be that it strikes me that you are putting an increased reliance on the companies to do your work for you.

  Charles Hendry: Well really it's a belief that the market can deliver some of these solutions but we will need to have a clearer framework within which we expect the market to invest and to deliver. This has to be seen alongside the other changes that are being made, such as the electricity reform package, which will start to be consulted on formally in the next couple of weeks, which will set out how companies can expect to be compensated or to receive a return on their investment in low-carbon generation. That's another part of the process. At the end of the day we don't believe it is right for the Government to be prescriptive on this and to say that we want this number from each particular technology.

  Q44 John Robertson: Okay, but will you guarantee there will be monitoring of it?

  Charles Hendry: There will be monitoring, of course. If we are not monitoring it we do not know what is coming through the system.

  Q45 Barry Gardiner: Minister, may I get clarity here? Is it true that the European Commission guidance on the application of the SEA stipulates that alternative policies should be addressed in the same way and to an equivalent level of detail? Is that what the European Commission guidance says? It is a straight yes or no.

  Anne Stuart: I believe it says that. I think it is talking about the alternative policies within an application.

  Q46 Barry Gardiner: And you have made efforts to include greater alternatives?

  Anne Stuart: Yes. You then, obviously, do more work on your chosen alternative because that is the one you will end up with.

  Q47 Barry Gardiner: Sorry, that sounded like a "yes" and a "no." Yes, the guidance says that they should be considered in the same way and to the same extent and level of detail, but then you wanted to add a rider, "But of course, we are not going to do that."

  Anne Stuart: Sorry, I mean not as part of the appraisal of sustainability. What I meant is that we didn't write NPSs for all the alternatives. We had lots of alternatives, but once we had assessed them—

  Q48 Barry Gardiner: But the alternatives are not addressed in the same way and to an equivalent level of detail, are they?

  Charles Hendry: In what respect?

  Q49 Barry Gardiner: In the guidance, it says that the application of the SEA directive means that the alternatives to the NPS policies should be addressed in the same way, in the same manner and to the same level of detail. That is not the case, is it, in what you are doing?

  Anne Stuart: We have done that in the context of the SEA directive. Once you have chosen the alternative, you are not required to carry on doing everything on the rejected alternatives. We have worked on the nuclear one.

  Hergen Haye: I would say that we did very carefully consider the alternate scenarios. Obviously, one could stipulate lots and lots of different scenarios.

  Q50 Barry Gardiner: It is not about stipulating lots of different scenarios. If you are setting up genuine alternatives, you have to give them the same level of consideration, and you have to show the same level of argumentation and reasoning for one as for the other. One may be your preferred alternative, but you have to give each a fair crack of the whip.

  Hergen Haye: And that has happened.

  Q51 Barry Gardiner: You say that has happened.

  Is it also the case that the Government's own guidance is that consultation of the public should always be at a stage when the options are still left open?

  Charles Hendry: The approach that we take to consultation is very often that the Government express a preference, and a desired way forward—a "minded to" approach, essentially—but then we will often set out the other alternatives and why we believe our chosen way is a better way of achieving that. Consultation on one option doesn't sound to me much like a consultation, however, so there clearly have to be other options within it.

  Q52 Barry Gardiner: Indeed. And you don't feel that the alternatives have actually been ruled out in the body of the appraisals?

  Charles Hendry: I don't. In terms of the way we have looked at how we need to move forward, we have examined a broad mix of technologies but we haven't been completely specific within that. We have said that we expect renewables to be a very key part of the new generation capacity but that leaves a very substantial amount for other technologies, which we would hope to be low carbon. We have not ruled out technologies as part of this process, however.

  Hergen Haye: Maybe to add to that, that is why, in a sense, we are consulting. That is why we have put unfortunately rather a lot of documentation out there, to show how we come to our conclusions and what the alternatives we have considered are, so that members of the public or interest groups can come forward and question that robustness. We would, as part of the consultation, look very seriously at any submission we receive to see whether we made mistakes.

  Q53 Barry Gardiner: Good. Well, have you received the submission from the RSPB, from which I have been reading?

  Anne Stuart: On the latest consultation? I have not seen anything from the RSPB.

  Q54 Barry Gardiner: The RSPB said that the appraisals "deal with alternatives in such a brief and cursory way that they repeatedly fail to give meaningful information about their likely impacts on the environment. Further, little effort has been made to integrate the revised findings into the content of the NPSs. Thus the appraisals do almost nothing to increase the level of environmental protection provided for by the NPSs." Do you recognise that?

  Anne Stuart: Forgive me, but that sounds like their comments on the last set of appraisals, before they approved it.

  Q55 Barry Gardiner: I can assure you that it's in relation to the 30 November 2010 session.

  Anne Stuart: They haven't sent us that, I'm afraid, so I haven't been able to comment on it.

  Q56 Barry Gardiner: Perhaps you could have a good read of it and then provide a note to the Committee as to what your views are.

  Anne Stuart: I'll ask them to provide it to us, because we certainly haven't received it.

  Q57 Dr Whitehead: I would like to move on to the overarching national policy statement for energy. You have made a number of changes to the policy document compared with the previous one. In particular, you've taken the needs analysis beyond 2025 towards 2050. Do you think you've laid enough emphasis in that on low-carbon generation and on the cumulative impact of emissions from the infrastructure decisions being made now?

  Charles Hendry: I think that the Department's been very clear about the process in setting out various pathways towards 2050, looking at the legal requirement on us to reduce our carbon emissions by 80% by 2050 and what sort of different scenarios could enable us to get there. So I think that all the approaches that we've taken work towards that 80% legally binding requirement.

  Q58 Dr Whitehead: In the document itself, you calculated that 26 GW of required new electricity capacity, over and above the 33 GW that would need to come from renewable sources, would be effectively determined by industry. Bear in mind that already there is 9 GW of capacity in planning permission, a good proportion of which is gas. Quite a lot of gas is already in the planning pipeline. It may look to the outside observer as if this is a charter for gas.

  Charles Hendry: Again, one has to look at this as part of a wider policy approach. The planning approach is one element of it, and giving guidance for the sort of application which could be considered and the right way to consider it, but alongside that, one's got to look at the electricity market reform packages, when we publish those shortly, because they will very clearly indicate how we are going to be incentivising people to invest in low-carbon technologies.

  In terms of the figures that you've put out, yes, we believe that there's a need for 59 GW of new capacity to 2025. A significant proportion of that, 33 GW, we hope will be renewables, of which 2 GW is under construction. The other 26 GW would include nuclear and, hopefully, other low-carbon technologies. We cannot be clear at this stage exactly what, for example, coal with carbon capture can contribute. We don't know for certain how the technology will work or what the cost will be of implementing it, so we have to maintain within there some degree of flexibility.

  The other thing that I think we should take account of is that our expectation is of a massive increase post-2025 of electricity generation as we decarbonise heat and move towards electric heating and electric vehicles. We need more base load if we're going to have more electric trains. Beyond 2025, there's going to be a very significant need for additional electricity generation, rather than what is simply required to replace that which is coming out of commission.

  Q59 Dr Whitehead: But doesn't the need case that you put here not only overstate the need for gas generation but, by doing that—for example, suggesting that the 9 GW of projects that have obtained planning permission but may not be built be discounted in terms of calculations—rather embed gas in the structures, so that the arguments that you put forward for additional electricity generation will be overshadowed by the fact that we will have a new generation of gas, according to the need arrangements that have been put forward in this document?

  Charles Hendry: I absolutely believe that we need new gas in the system. If you look at the other areas involved as we move towards a low-carbon economy, the time scales mean that we have to have investment in new gas in the meantime. The first time that nuclear could be brought on stream is 2017 or 2018. Coal with carbon capture is still going to be at a trial stage by the end of this decade. The massive roll-out of renewables, particularly offshore, is going to be at the end of this decade and beyond. The development of tidal technologies will be in the 2020s.

  In terms of the pressure on us to replace a great deal of the plant that is coming out of commission, we lose a third of our coal in the next few years and much of the rest by the end of the decade, and most of our nuclear by the end of the decade. In terms of the new generation capacity that is there, gas has to have a role to play in that. We also have to look at—this is not a planning issue so much; it's a policy issue—how we decarbonise that by the 2030s. We have a short-term need to secure new gas generating capacity, but we have to look at that at the same time in terms of how one might drive forward decarbonising it in due course. That's why we're also looking, for example, at CCS on gas as part of the pilot projects.

  Q60 Dr Whitehead: You've perhaps gone beyond the question of there being a need for some new gas towards the fact that most of the balance of the required additional capacity could well come from gas. You specifically made reference in NPS 1 to a balance of 18 GW coming from non-renewable capacity, which, for reasons I've outlined, could well be almost entirely gas. The suggestion that those 18 GW might come from other things is a function of the time scale as to when those other things might come on stream. The default in those circumstances may well be gas, and there doesn't appear to be any mechanism in this document, bearing in mind what you have said about decarbonisation, easily to overcome that—

  Charles Hendry: But one has to separate, then, the two parts of the policy. This is about planning rules; this is about what is permitted to be built. Alongside it, though, one would be looking at how one charges for carbon, so the Treasury-led consultation that takes place shortly on putting in a carbon tax—a carbon floor price—will be part of that process. We'll be doing work alongside that, looking at how one incentivises investment in low-carbon technologies more generally and looking at a range of options for how that should happen.

  No one is going to be committing at this stage to investing in new gas plant until they know the financial circumstances. That's the other part of this programme, which we start to consult on in the next few weeks. Yes, a great deal has been consented, but from the contact that I have with the energy companies, I would say that those investments are far from certain. Under the regime that we inherited, the default mechanism would be gas, without any doubt, but what we are saying is that if we're going to encourage investment more generally in low-carbon technologies, a different financial structure is going to be necessary as well.

  Q61 Dr Whitehead: But meanwhile you've changed the projections for gas demand in this document.

  Charles Hendry: Based on the most up-to-date figures available to us.

  Q62 Dr Whitehead: So is it your view, bearing in mind those changing views on gas demand, that these NPSs would need to be kept up to date?

  Charles Hendry: We will constantly have to keep up to date the estimates for where we think gas demand is going to go. In terms of energy security, if we are going to be increasingly dependent on imported gas—the expectation is that we will be and that 65 to 75% of our gas by 2020 could be imported—that means we have to have assurances about what storage, what pipeline infrastructure, and what LNG infrastructure will be necessary. While we're not saying that is necessarily our desired outcome, what we should be saying is that, if that is the outcome in terms of how much gas does end up coming into the system, how do we ensure that we have the security-of-supply side covered as well?

  Q63 Dr Whitehead: But doesn't this, in cumulation, simply disappoint, frankly, the recommendation of the Committee on Climate Change that the power sector should be substantially decarbonised by 2030, unless, as you say, there is perhaps a very high level of CCS applied to gas in the run-up to that period?

  Charles Hendry: I think we would expect the system to be substantially decarbonised by 2030. I think that if people were investing in a new gas plant now, they would undoubtedly in the next 20 years recoup the investment that they have made many times over. After 2030, I think the Committee on Climate Change would envisage some of them to be either retrofitted with carbon capture technology at that time or used as a peaking plant, which will still be an important part of the mix. We will still need that on cold winter days or to provide back-up for renewables. So they will have a continuing role.

  Dr Whitehead: Unabated peaking plants?

  Charles Hendry: Looking at gas, they still have a limited number of operating hours when it can contribute to that process.  

  Q64 Chair: Can I just pursue this point? You referred to a substantial increase in electricity requirements after 2025 because of heat, and electric vehicles, and we all understand that. Then you said that people investing in new gas capacity will have recouped their investment by the time it is necessary to substantially decarbonise the generation process. I am not quite sure how those fit together, because some of this new gas capacity is not going to be built in the next couple of years, but in the latter part of the coming decade. We still have no certainty that CCS is going to work on a commercial basis. So you could have a huge amount of gas capacity built between 2015 and 2020 that becomes unusable after 2030.

  Charles Hendry: And that is exactly the discussion that we will be having around the emissions performance standard—about how it should be implemented, whether it should be on coal or on gas as well and whether there should be a requirement to retrofit. Those are exactly the areas that we need to explore. If people do not have the certainty, it is very hard to see how they will secure an investment decision. They need to understand what the long-term environmental requirements will be.

  Q65 Chair: Substantially decarbonising means getting the emissions per kilowatt down to about 60 or 70, doesn't it?

  Charles Hendry: In terms of the initial drive, the EPS has been clearly looking towards coal, particularly unabated coal, and saying, "We don't believe that there's a future for unabated coal in this country at all." It is then about looking at whether that should be applied to gas in due course. An alternative to that—the Committee on Climate Change has been exploring this—is asking whether the plant can be used for a number of operating hours, so it is there to provide back-up capacity rather than having to build a new plant that will not be used on a full-time basis. But at the same time, if you look at what has happened with the large combustion plant directive, where there was a very clear end date by which plants have to comply with certain emission standards, the company has to decide whether there is enough life left in the plant to justify retrofitting it with the FGD technology to meet the emissions level. Those same commercial decisions will need to be made. But I absolutely accept that until there is clarity in this area, it is hard for businesses to make a commercial decision on the right way forward.

  Q66 Chair: I think the clarity needed is whether the Government are serious about achieving the objective. The sums just don't add up. If you say you've got to get down to average emissions of 70 per kilowatt hour by 2030, and unabated gas is about 400 to 500, there could hardly be any role, apart from a tiny bit of peak demand, for unabated gas. A company that is thinking of building after 2015 is not going to convince investment. The anxiety that we have is that the challenge is much more urgent than what the policy is capable of delivering at the moment.

  Charles Hendry: I don't agree with that. We have been putting in place the most substantial reform of the market in 30 years. We believe that the existing system simply would not attract investment. What we don't know at this stage is where the investment will be coming through, but we believe that the United Kingdom is now one of the most interesting places in the world for new nuclear. One can look at the companies keen to build here and without subsidy, and we hope that that is going to be a key part of the mix going forward.

  We have committed £1 billion to CCS, which is more than any Government anywhere in the world have committed to a single plant, and I think that shows that we are determined to lead in that technology. We have extremely ambitious plans for renewables, and we're looking at the right financial structure to drive forward the development of offshore wind, biomass, any other renewable technologies and further development of onshore wind.

  We also recognise that there is a need for gas in that mix. Gas has often been the missing part of the energy narrative. The typical emissions level of a new supercritical gas power station—an IGCC—would be 350 grams per kilowatt hour. Clearly, with carbon capture and storage, that can be brought down significantly further. Advancing technology will bring improvements as well. But we are certainly within this 20-year window. There is no doubt that, given the much lower capital costs of investing in gas and other alternative technologies, people can recoup the cost over that 20-year period. By the spring of next year, at the end of the EMR process, which will set out the whole of the future funding strategy and will also look at the emissions performance standard, people will have complete clarity on what the market is going be like looking forward.

  Q67 Chair: And that is coming out on 16 December.

  Charles Hendry: It is coming out before Christmas.

  Q68 Barry Gardiner: Minister, are you a supporter of AV?

  Charles Hendry: Of the alternative vote? No, I'm not.

  Q69 Barry Gardiner: So why are you going for it when it relates to gas? Gas is the AV strategy here, isn't it? It's everybody's second best. It doesn't achieve the carbon savings that we need. What you are doing here, by adopting this strategy, is pursuing a route that you think is likely, but you only think that it is likely because you are not prepared to give clear policy signals on nuclear as a Government, because of the political problems that you have as a Government, over it. It was very interesting to hear the CBI stressing today that they need much clearer signals from the Government on nuclear in order to get over this problem.

  Charles Hendry: I find that absolutely extraordinary. I can go into the AV system and why I am not a fan of it, but the Chairman may think that that was a slight diversion.

  In terms of what we have done on nuclear, we have re-consulted on the national policy statements, which we accepted from the previous regime, and which had not been as robust as they needed to be. That is a key step forward. We have taken a process of regulatory justification through the House. Bizarrely, that was opposed by the shadow Business Secretary, the shadow Chancellor and the shadow Education Secretary, who actually opposed, in one of the biggest votes—500-plus to under 100—the regulatory justification process. That was a key legal milestone as part of that process. We have looked at the nature of subsidy. We have defined what that would be, and industry is happy with that. We are much more urgently taking forward how one assesses the full lifetime cost of dealing with nuclear waste and spent fuel, and doing that in a way that industry is content with. We are looking at the whole process of a carbon floor price, which industry has told us is important. We are looking at other financial drivers to support investment in low-carbon technologies.

  When you look at that in the context of seven months in government, it is an enormous amount of progress on nuclear. Nobody can look at this Government and say that we have not been driving forward that agenda, to the extent that I think that we are the most exciting place in Europe, and probably one of the most exciting places in the world, for new-build nuclear.

  That is one part of the strategy. We are also taking forward policies to make it more attractive to invest in renewables and to invest in coal with carbon capture, but we still see that there is going to be a need for new gas as part of that process. Investors are keen to do it, but they need to understand what the market system is. We have had seven months to start putting that in place. It is a shame it wasn't done years ago, but, nevertheless, we are doing it now.

  Q70 Dr Whitehead: So, on the basis of that argument, what proportion of the balance of 18 GW to come from non-renewable capacity would you think would come from new nuclear?

  Charles Hendry: We, in this process, have identified sites that would allow for 16 GW of nuclear.

  Q71 Dr Whitehead: Sixteen out of the 18 by 2025?

  Charles Hendry: But look at that not just in terms of what the need is for 2025; one has to look at the greater electricity demand that is going to be in the system as we electrify the transportation system and the heating system moving forward from that.

  Q72 Dr Whitehead: To be clear, a strategic view would be that, out of that balance of 18 GW, 90% would come from nuclear by 2025.

  Charles Hendry: The 18 GW doesn't take account of what is fully under construction at the moment, but, in terms of the way that we are looking to take this forward, we believe that there is interest in building 16 GW of nuclear power. That is what the potential investors have told us. We believe that that is an important part of the balance going forward. We believe that coal with carbon capture will be a modest part of that by the earlier 2020s, but we want to see that moving forward thereafter. One shouldn't just see this as 2025; this is for what our electricity need is going to be up to 2050, and so 16 GW of nuclear coming through over that time scale would go towards that.

  Q73 Dr Whitehead: That's about two nuclear power stations every year from 2018 to 2025.

  Charles Hendry: That is what those in industry say they are keen to invest in and build, in order to give us a balanced portfolio.

  Q74 John Robertson: Minister, it is not often that you and I agree on things, but we do agree with each other about nuclear, which is an interest of mine as chair of the all-party group on nuclear energy. I want to jog your memory a little. You used to sit in the seat where Barry Gardiner is sitting today, and we were talking about gas and CCS. You were vehemently fighting for the trial periods—gas being one of them. We know that the first one is on coal, but the other three have not yet been given out. What are you doing to ensure that one of them will be about gas?

  Charles Hendry: We've announced that we are keen for gas to be part of the project. We did a market-sounding exercise to see the sort of projects that industry was interested in investing in. What came through clearly was a strong interest in gas and in some pre-combustion facilities, and a great interest in greater collaboration between companies than was allowed on project one. Therefore, we have opened up the competition for the next project to gas as well.

  Q75 John Robertson: Let me raise something that I raised last week with your Department, which I imagine you were told you about. I have heard complaints from companies that are involved with the project in Scotland saying that feet are being dragged at the moment, and that the No. 1 trial is behind schedule. Is that true? If so, what is happening with the other three projects? How far behind schedule are they?

  Charles Hendry: The competitions are completely separate. In the first competition we are down to one company, Scottish Power at Longannet. It is in discussions with the Government about how it would use the £1 billion to deliver the outcome that we are keen to have. There is a feed process looking at the actual costs, structures and technologies involved. It was keen to continue that work, which will go through to the spring. Therefore, we are looking to see how we can secure closure on that competition. The additional competition will be for three further plants. We will shortly be announcing exactly what the criteria for those will be, and stating whether we will announce that all in one go and look for different applications for different types of projects to come through.

  Q76 John Robertson: Do you have a timeline for each one of those projects?

  Charles Hendry: We are looking for the Longannet one to be operational by 2014 to 2015, which is what Scottish Power tells us it believes it can deliver. The others would depend on the technology. They will predominantly be new build plant. If it is a full-scale coal plant with carbon capture and storage, that will realistically happen in 2017 or 2018. If it is a pre-combustion facility, it could be much quicker.

  Q77 John Robertson: Let me jog your memory once again. The document I have in front of me is the Energy and Climate Change Committee's proposal third report. Funnily enough, your name is on it. You were very happy to go along with the fact that we wanted to listen to the Committee on Climate Change and make it part of the process. Why have you changed your mind?

  Charles Hendry: We haven't. We asked for its advice. It said that gas should be part of the process and we responded by saying, "We'll make it part of the process." That is listening very carefully.

  Q78 John Robertson: Let me rephrase that. You've disregarded the recommendations.

  Charles Hendry: In what respect?

  Q79 John Robertson: Let me see what is written here. The question I was to ask you was: why did you choose to disregard the Committee's recommendations concerning the possible role that the Committee on Climate Change could play in guiding the consent and review processes for national significance in energy infrastructure projects?

  Charles Hendry: Because, as I was explaining earlier, this is about the planning process and not about the sustainability and the low-carbon aspects. We worked very closely with the Committee on Climate Change, and ensured that we asked it for appropriate recommendations. We took very close advice in relation to how we should be decarbonising the economy. That is separate from the planning process. We believe that the Government should be setting the sustainability criteria. That is a matter for Government policy, and there should be a separate process to guide that planning process.

  Q80 John Robertson: But do you take regard of what the Committee says?

  Charles Hendry: Certainly—we've asked it whether the 2020 renewables objectives are reasonable and whether we could even aspire to go further. Members of the Committee came back and said they believe that they are about right. We have asked them to do further work for us, which will include recommendations on planning systems.

  Q81 John Robertson: Okay. Why did you reject the Committee's recommendation on a hierarchy of technologies to guide the implementation of the NPSs?

  Charles Hendry: We don't believe that it is right for the Government to specify exactly what we want in each area. That would be the only way that one could deliver that hierarchy. We do want new nuclear and we want coal with carbon capture. We do want renewables. We don't yet know what each of those technologies can deliver. We don't know which industries and markets will come forward as bids are made for new generation capacity. The one thing that we do know for certain is that, if we say we want this much, they will come back to us and say, "Well, if you want that much, you'll have to pay more for it."

  Q82 John Robertson: That is exactly what you said to Alan Whitehead in relation to the energy production required from nuclear. You told us about 18 GW, 16 of which are going to nuclear. You are, therefore, putting them in a position where they must deliver.

  Charles Hendry: We've identified sites and industry we believe are appropriate for new nuclear investment. We have taken some sites in Cumbria off the list, which we felt were inappropriate for new nuclear investment, but other sites could come forward. It is not an exclusive list. If people want to come forward with an application to build a new nuclear facility on a site not on that list, they are entirely free to do so. It is more challenging to do so than on a site that has been approved by the Government as being site-appropriate. We are not saying that we are committed to 16 GW of nuclear, but this process has identified sites.

  Q83 John Robertson: So would I be right to assume that it is a minimum of 16 GW?

  Hergen Haye: In the sites that we have identified, we were guided by the possibility in terms of what can be constructed. More importantly, we were also guided by what industry is saying it would like to invest in. Collectively, the three consortiums identified some 16 GW of new-build nuclear. That is their plan, but that is not to say that it will happen. There are many drivers that will influence their investment decisions. As you know, it is an extensive and expensive process to build nuclear plants, so we can only rely on what industry has announced so far. We want to make it possible, but we don't know whether it will be 16, or more or less. As the Minister has said, it is for energy policy to determine whether there should be the possibility, through planning, for the IPC not to reject another technology that makes an application.

  Q84 John Robertson: In that case, what's plan B? What happens if they don't get to 18? What happens if it's 14 or 12? What are you going to do?

  Charles Hendry: There is flexibility in the system, but we are in a situation in which we face a mountain to climb, because of the failure to secure adequate investment in the past. It has been clear for some years what is coming out of commission, and it would have been better if more was under construction now. You and I would agree that the five-year moratorium on nuclear was unhelpful to that process. We have to start from the position that we are in, and we have to be realistic and put in place a financial structure that we believe will attract investment in a whole range of technologies. We have to recognise that this is not the best place to have started from, and it would have been better if we didn't have to climb up such a cliff.

  Q85 Chair: Some of these nuclear sites may have two or three plants on them?

  Charles Hendry: Yes. Absolutely.

  Q86 Laura Sandys: I want to pursue the issue about the Committee on Climate Change, because it is not even being made a statutory consultee on the NPSs.

  Anne Stuart: The Committee on Climate Change is a statutory consultee on the NPSs, but it is not a statutory consultee on individual applications. So it has been invited, and it has made some helpful comments on the NPSs themselves. We are not proposing that the IPC should consult it on every individual application that comes in, because, as the Minister has said, that is more a matter of individual planning decisions than the policy area in which it would normally be involved. That doesn't mean that, if it had strong feelings about a particular application, they couldn't put forward views and that those views wouldn't be listened to very carefully, but we wouldn't expect it to do that in every case.

  Q87 Laura Sandys: The issue is that we have many different objectives and the planning process is meant to deliver those objectives, one of which is our carbon targets. So in many ways it seems strange that, as an adviser to Government and as an independent body, it is not part of that debate, because climate change is as much a security risk and should be as much a part of this process as the energy security and energy generation aspect. Would you reconsider that?

  Charles Hendry: On individual planning applications, I think we would completely overload them if, every time that there was an application for a wind farm, a grid connection, a gas plant or whatever it happens to be, they were formally consulted.

  Q88 Laura Sandys: So they've actually said they don't want to be?

  Charles Hendry: I don't know whether they've formally said they don't want to be, but our view is that the role which they can most constructively play is in overall strategic policy for how we move towards a low-carbon society, decarbonise and meet the 2050 and 2020 targets. We think that there are other policy drivers which help to deliver that. We know that there are legally binding targets on us for 2020 and 2050, and therefore the policy drivers which we've put in place are geared towards that. We don't need to consult on every individual application along the way.

  Q89 Laura Sandys: And the proposals that you've put forward, they've come back positively? They feel that these will drive investment in the right direction?

  Charles Hendry: They're supportive of the work here, and they're also supportive—they'll be producing their own report, I think, in the next few days—of looking at the market reform mechanisms and exactly what is necessary to stimulate new investment in these technologies.

  Q90 Dan Byles: Minister, you've said quite clearly that there is no place for unabated coal. Would it be fair to say that if CCS turns out to be economically and technically not feasible, we will see an end to coal-fired energy production in the UK?

  Charles Hendry: There is no future for coal without carbon capture in this country. The technology is taking this forward to try and ensure that we develop appropriate technologies that allow coal to be part of the mix.

  Q91 Dan Byles: But that's still assuming that CCS will work, which is not a given. I think that's why we're investing £1 billion in seeing whether it does work, but it's still the case at the moment that there is no commercial CCS coal-fired power station working anywhere in the world.

  Charles Hendry: Absolutely. There are projects that do individual elements of it, and the challenge now is to bring those together. We don't see any technological or technical reason why that shouldn't be possible. The key element, therefore, is going to be at what cost we can deliver that.

  Q92 Dan Byles: Exactly. Is it economically feasible and not just technically feasible? Would you be comfortable presiding over the end of coal-fired energy production in the UK, from an energy security point of view, if that's the outcome if CCS does not turn out to be feasible?

  Charles Hendry: I think that's why we have to have a broad mix of technologies coming forward. Each technology has its own contribution, which it makes in a different way. Nuclear, by definition, is base load. One doesn't want to be turning it on and off; one wants it to be running 24 hours a day, seven days a week. Renewables, inevitably, are going to be flexible—that's an inherent part of the process. Therefore one needs some balancing technology, which can be coal—but clean coal—gas or biomass, which have the variability elements. One has to look at the whole range.

  That is also why we're looking at other areas in terms of how one gets additional back-up capacity: interconnectors to Norway or elsewhere in Europe. We're looking at how we work with other countries, and an all-islands approach around the UK to free up resources that could otherwise be stranded. We're looking in a more holistic way than perhaps has happened before at how we make sure that we have enough supply to meet the demand.

  Q93 Dan Byles: I'm still nibbling away at plan B. I know we've asked you before, but what if CCS doesn't work? It seems to me that we're betting a huge amount on CCS working. Do you think that the emissions performance scheme will be flexible enough to cope if CCS doesn't turn out to be economically feasible for coal or for gas? It seems to me that gas or coal—or something—has to be in the mix. As you said, we can't survive with nuclear and renewables alone; it simply won't work. If we're basically saying that unabated gas is going to be used only for peak production—if that's the only scenario in which you'd consider that continuing—if CCS doesn't work, we have a problem, don't we?

  Charles Hendry: We don't have a problem on our own; this is a global problem. If one looks forward to 2050, hydrocarbons—coal and gas—will still be a critical part of the world's energy infrastructure. That's why there is so much work going on around the world to try to make sure that CCS does work and is made affordable. It's encouraging that countries such as China are putting an enormous amount of resource into this area as well, because it is clearly one of the countries in which it can make the most significant difference.

  We are absolutely committed to making sure this works. We're committed to being a global leader in the technology and we will put everything that we can into ensuring that it does work and that it's something that Britain gains out of commercially as well. We don't start off from a position of saying, "What if we fail?", because that tends to increase the prospect that you will fail. We're starting off with a determination to succeed.

  Q94 Dan Byles: But I don't think it's unreasonable to suggest that there should be some contingency planning in case we do fail. We've asked you and the Secretary of State, "What is the plan B if CCS doesn't work?" The answer continually comes back, "It must work."

  Charles Hendry: We are putting a great deal of resource into making sure it does work, but the plan B can be a range of alternatives. It could be biomass, which has the same flexibility that coal can have but is obviously a sustainable resource. It could be gas. It could be much greater use of pump storage. For example, our chief scientist has identified 13 pairs of Scottish lochs where you can use cheap electricity to pump up to the higher loch and then release the power—a huge amount of capacity at a few seconds' notice—and therefore compensate for some of the variations that would otherwise be there.

  We don't see an individual element that would be the plan B, but we are certainly looking broadly across the whole of the energy spectrum to ensure that if any particular element doesn't happen—that could be nuclear, carbon capture or a large roll-out of renewables—there are other technologies that can come in to take up the slack.

  Q95 Dan Byles: If the individual CCS plants do turn out to be feasible, we're also going to require some sort of CO₂ transportation network or grid. At the moment there is no NPS covering CO₂ pipelines or CO₂ transportation. Do you anticipate bringing forward one to cover that some time soon?

  Charles Hendry: Under the current system, the IPC would make a recommendation on a CO₂ pipeline as part of the planning process more generally. We've taken the view that that's one area of technology that is not sufficiently advanced to have its own NPS at this stage, but clearly as that technology comes forward—and we're looking at strategic infrastructure of that nature because one would want to build oversized pipelines rather than every individual facility having the same pipeline connection—we'll need to review whether an NPS of its own would be important to deliver that.

  Q96 Dan Byles: And would that include offshore CO₂ transmission as well as onshore CO₂ pipelines?

  Charles Hendry: It would include both.

  Anne Stuart: Offshore pipelines would be under a different planning regime, because unless the localism Bill changes the current IPC Planning Act regime—I suppose it's possible—it will not cover the offshore element of the pipe, which is one of the things that we're still working out to make sure that things go smoothly.

  Q97 Chair: When you say that there'll be a global problem if we can't make the CCS technology work at scale, that is clearly true, but of course it's a global problem that's a lot more painful for some countries than others. We don't need to look very far to see that the difficulties that they will have in France under that eventuality will be much fewer than ours.

  Charles Hendry: Without doubt. Individual countries have chosen their different energy paths over decades.

  Q98 Chair: And we could still do so. If we chose to, we could still decarbonise our electricity generation by 2030 without having to rely on CCS.

  Charles Hendry: By pursuing a more aggressive nuclear approach.

  Chair: Exactly.

  Charles Hendry: I think that there's also a technical capability for delivering. If one looks at the fact that by 2023 all of our nuclear plants except Sizewell B are due to have closed, the initial plants will simply be replacing capacity that is coming out of the system, and it won't be until well into the 2020s that one potentially starts to add to that. There is a physical speed at which this can be done. I think that most people look at the plans for new nuclear in this country and think that they are extremely ambitious. It will therefore be challenging to achieve them, let along to go much further.

  Q99 Chair: But what we're saying is that you can't build enough new nuclear in 20 years, even though there is an established technology that is widely used in other countries, but somehow, magically, we're spending £1 billion researching a technology that no one in the whole world has ever made to work, and it's going to be so successful that in the space of about five or six years after we've suddenly discovered it that we're going to be able to do all we need to do. If a business adopted that sort of strategy, and said that it was going to bet the farm—the whole business—on the possibility that its research works and that it was going to ignore proven technology, it would be shelved and the City would sell the shares.

  Charles Hendry: That's exactly why we're not putting all our eggs in one basket. That's why we're taking a broad approach to different technologies. If we aren't doing the work on CCS, other countries will take it forward. We might well end up applying it in any case. We have a fantastic opportunity in this country because we have some of the best sequestration sites in the world. We've got people who are used to working in those conditions. We've got an oil and gas industry that can play a very important part in making it happen offshore. We do have a real opportunity to lead in that area. If we don't do it, I think that some others will take it forward and we will end up having to buy the technology in.

  But we're not saying that it should be only CCS; we're saying that CCS is part of the equation. We want it to work, but nuclear should be part of the equation, renewables should be part of the equation, and the Government should not be saying, "We're ruling out technologies that at this stage offer a great deal of promise."

  Q100 Sir Robert Smith: I declare my entry in the Register of Members' Financial Interests as a shareholder in Shell. Do the French have a strategy for replacing all their nuclear in time and at a cost that we could afford?

  Charles Hendry: You might have to ask the French Energy Minister to answer that question. Clearly, taking account of the life span of a nuclear power plant—they started this programme 30 years ago—they have significant opportunities looking forward.

  Q101 Sir Robert Smith: For plan A to work, it doesn't just need a good planning regime; it is the Department and partners coming up with the competition. How is the Department taking forward the regulatory regime so that people know how they are going to have to operate if they are successful?

  Charles Hendry: For CCS?

  Sir Robert Smith: Yes.

  Charles Hendry: We have set up a CCS development forum, which is based very much on the nuclear development forum, to look at where the barriers to investment are and to bring together the key players in the industry from the oil and gas side, the generator side and the people who might be involved in the carrying of the CO₂. They are looking, therefore, at where they see the barriers. We are consulting on whether that approach should be done through a regulated Government monopoly—for example a new carbon management authority—or whether one can leave it to a more flexible system. We are looking at exactly those issues for what will be necessary to encourage investment to go forward more generally.

  Q102 Sir Robert Smith: One final thing. Coal can be flexible at the moment, but if it is post-combustion CCS, my understanding is that that makes it a pretty base load-type operation, because, for a CCS plant to operate, it has to be operated in a fairly consistent fashion. It is not a flexible response.

  Charles Hendry: Its flexibility is diminished. It uses a great deal of its output—perhaps a quarter—to run the plant itself. Once it starts to operate, a great deal of extra output is required to get the CCS plant operational as well. It is not an absolutely smooth transition and process in that respect. I think one might also need to look at that system and say that there may be times of peak demand when one would want every single element of output going into the national grid. Therefore, one would say that the CCS facility should be switched off in that period because it would seem to be counter-productive to energy security needs otherwise.

  Q103 Laura Sandys: Moving a little away from planning structures and so on, when we start looking at energy security, your response to Alan's point was that more than 60% of gas will be imported. We have serious exposure to a world that looks relatively insecure in many ways in which we are going to be importing 35% of LNG and where trade groups are starting to become a little more vulnerable with piracy. Who is doing the cost analysis of that insecurity, and is the National Security Council also looking at the risks that we face? Ultimately, a Government have to keep the lights on, and if we end up in a situation in which certain politicised Governments are selling us energy, we will be very vulnerable. In many ways, I come back to the Chair's point that there are tested technologies that can deliver—particularly nuclear. We are exposing ourselves to a period of risk when the politicisation of energy is increasing.

  Charles Hendry: But we also have to recognise the time scale involved in building a new plant. If the go-ahead was given tomorrow morning, with the full planning process approved, it would still take six years to build a new nuclear plant. Most of the others don't have their investment packages ready and do not have board approval. EDF at Hinkley Point C would hope to be on power by the end of the decade—2017-18—and others would follow quite quickly after that, but there is no possibility of doing anything before that time. The businesses involved simply cannot make it happen.

  Q104 Laura Sandys: What is the risk profile between now and 2030 of being exposed to that amount of imported energy from countries that might use it in a political fashion, or certainly with financial leverage?

  Charles Hendry: We need to take different responses to address the energy security issue, which you quite rightly highlighted. I have given licences for new gas storage facilities that would double our national gas storage. One of those hasn't yet got the final investment decision, but they will be significant infrastructure investments.

  In answer to your question, the National Security Council does look at this and the Secretary of State is a permanent member of the National Security Council. Part of its remit is to look at our critical national infrastructure and to make sure that is well protected and well looked after. We are taking measures in the energy Bill coming through this winter that will put a much greater obligation on the gas suppliers to ensure that they have adequate supply to meet the demand that is there, with punitive charges if they fail to do so. We believe that that will drive additional investment in storage, pipelines and LNG facilities. What we are trying to do is to respond to the threat that is out there of greater gas imports coming from a wider range of countries.

  Norway will still be our most important trading partner. I've had contact and discussions with my Norwegian counterpart to find out whether we can encourage them to build a new pipeline to the United Kingdom. We are looking at how we can share in those different aspects. I am going to Qatar in a week's time to make sure that they understand our need for the tankers to continue to come to Milford Haven, rather than going elsewhere around the world. If there is a silver lining in the issue, it is the fact that we are doing this at a time when the outlook for gas is benign. We are finding that the development of shale gas in the United States has completely stopped their imports of LNG gas. The gas price has been relatively low—it is spiking at the moment, but it has been relatively low—and we are therefore moving into a period of fairly plentiful gas, but that will not make us complacent. We will be driving forward measures to enhance our gas security.

Q105 Barry Gardiner: Given the winter supplementary estimates, I just want to take the opportunity to ask the Minister, while he is here, what he feels about the £52.5 million increase due to the British energy liabilities provision, compared with the main estimate earlier this year? Does the Minister want to comment on that for us?

   Charles Hendry: We have looked at the national policy statements and said that there are aspects of the waste issue that they should look at more fully, particularly the interim waste management on site as opposed to the deep geological disposal facility. We believe that there is a moral imperative on the Government both to carry forward decommissioning and to look at a longer-term solution for waste management in due course. We are taking forward the voluntarist approach for a geological disposal facility. There is a nuclear liabilities fund to assist that. The cost of the new waste that would be contributed by the new plant would be covered fully by the companies responsible for creating it.

  Q106 Barry Gardiner: My question related to the winter supplementary estimates, and the increased call that you have had of £52.5 million in relation to those liabilities provisions for British Energy. That seems to be a rather large hike since March this year, and it really demands some explanation as to why it was got so badly wrong before by those who were doing the estimating for the Department, or what has happened in the interim to cause such a large hike.

  Charles Hendry: I am very happy to write to you about that in more detail. It is slightly outside the scope of this hearing.

  Chair: More than slightly. By all means, write to us about that, but I think I'd rather stick to what we've got as we are running out of time.

  Q107 Christopher Pincher: If I may drag you back to gas, Minister? We have gone over it quite considerably in the past half an hour or so, but you mentioned that we are looking to double our gas storage facility. Does that mean that we're going to double it to two days' worth of storage capacity? In answer to a parliamentary question, in the past 12 months we have had as little as one day's worth of demand stored. What do we anticipate to be the minimum threshold of stored gas?

  Charles Hendry: We see gas storage as one of the elements; we don't see it as the only one. We have storage capacity for 15 or 16 days' worth of gas supply at peak winter demand. If that were doubled, at the lowest point it shouldn't come down to two days' worth of gas—as one would expect in the middle of the winter, it comes down relatively significantly, but it doesn't come down to those margins that I think we all feel are much too close for comfort. As I have said, we see gas storage as one of the elements, but we want to secure other pipeline connections, LNG facilities, more interruptible contracts and more long-term contracts on pipelines—all have a role to play. Our view is that the Government haven't played a sufficiently strategic role in looking at the gas outlook in the past, and therefore what we should be doing is being much more engaged in securing those long-term contracts. If that is with Norway, or with Qatar, we believe that is an extremely secure arrangement. There are areas where we think Government can play a useful role, but at the end of the day storage is part of it but it is not the only part of it.

  Q108 Christopher Pincher: But if we were to have 32 days' worth of storage, we would still have far less storage than, say, Germany, France or the United States. Why is that?

  Charles Hendry: But one also has to look at the extent to which they are import-dependent. Germany is almost exclusively dependent on Russian gas. It has imported Russian gas for 30-something years, and has never had an interruption in that process right the way through the Cold War. It has a very different situation from ours.

  Clearly, the French use of gas is massively lower than ours, because 80% of French electricity comes from nuclear and much of the rest comes from hydro. So gas is not used for generation but it is used for domestic and industry use. The totality, therefore, of French gas storage is very different in terms of the degree of usage.

  Q109 Christopher Pincher: But they rely much more on nuclear, and you're suggesting that we rely on a mixed supply. You have been very clear that you are going to invest and put a great deal of effort into making sure that CCS works, but, as we have heard, it might not. We are investing quite laudably in renewables, largely in wind power, which of course is intermittent. If we are going to rebuild our nuclear capability, that is going to take time; you have said six years. So there is going to be an interregnum, and there is, therefore, going to be a reliance on gas. I just wonder whether you are putting enough emphasis in the NPS on gas storage.

  Charles Hendry: We are putting the emphasis through other rivals. I think the most significant change is the one in the energy security and green economy Bill, which will put a much greater obligation on gas companies to ensure they have enough gas to meet demand. Again, the NPSs are about the right planning process—the new gas storage facilities and parts of the gas network—but what we are looking at separately is how we really, truly address this issue of gas security. As we move towards being increasingly dependent on imported gas, we have to do much more than has been the case in the past to secure those supplies.

  At the end of the day, this is left to business. I don't ultimately want this to be run by Government, and for me to go into the office every morning and think, "How much gas do I buy or sell today?" I am sure that would quite quickly end in tears. Therefore, we want to encourage the market to operate in this area, but to do so within a much clearer framework set by Government.

  Q110 Christopher Pincher: In terms of transmission of gas to where it will be used in the power stations, are you confident that we have those stations; that we are building more of them in the right place; and that the infrastructure to transmit it is there? I read that the estimate of investment required in the next eight years is some £32 billion. Do you think that is an accurate sum?

  Charles Hendry: I think the £32 billion is the National Grid's assessment of what is necessary for infrastructure in both electricity and the gas network. We certainly have no reason to dispute those figures.

  There must be more interconnections, and one of the very positive roles the European Union is playing in this respect is actually looking at the role of interconnectors to give security to member states. We are working very closely with it in that work, which is very productive. It will be a key issue for the Heads of Government when they meet to discuss energy issues in February. It is about not only looking within the United Kingdom, but how one looks internationally at the role of interconnectors.

  Q111 Christopher Pincher: And does that figure include the cost of mitigation of effect? We have a localism agenda too, and we do not want to disrupt beautiful rural parts of our countryside. Does that £32 billion include mitigation? That could cost a couple of hundred million for sure, couldn't it?

  Charles Hendry: In terms of the electricity infrastructure, because the gas infrastructure is predominantly buried and the electricity infrastructure predominantly uses pylons. I am very pleased that some new work has been commissioned through the Institution of Engineering and Technology to look at the cost of undergrounding, because I receive a significant amount of correspondence from colleagues who are very worried about pylons in the countryside and the fact that they are much larger than has historically been the case. What we need to have is a much clearer and robust piece of science that looks at the costs of undergrounding, because we hear great differences. Some people say it costs four times as much; some people say it costs 14 times as much. So, we need a much better understanding of what the actual costs are.

  Q112 Christopher Pincher: You mentioned the role of the EU. Are you working with our European partners to encourage them to diversify their gas supply so that, as Laura has suggested, it does not come from powers that may not be quite as benign as Norway is to us? There is a trading effect, isn't there? If the European lights are not switched on, that affects us economically, regardless of whether we have an economically safe supply of energy.

  Charles Hendry: We are completely interdependent now. The Russia-Ukraine dispute, nearly two years ago, created great pressure in the United Kingdom, because a great deal of our gas was shipped out through one of the interconnectors into mainland Europe. The role of the interconnectors is extremely important. Part of that process is also how we get new routes to market, and how we manage to get gas from Russia or from central Asia, and avoid the Ukraine. The Nord Stream pipeline, the Nabucco pipeline and the South Stream pipeline are all part of that process. As the European Union, we have a shared vested interest in getting gas through a more diverse range of routes. Liquefied natural gas is clearly part of that process as well. We are finding that that is creating positive discussions between the suppliers and the users. The Russians will continue to be by far the most predominant supplier to Germany, particularly once Nord Stream is built. One has to live with the reality of where the gas comes from, but to ensure that some of the constraints that have come through territorial disputes, such as Russia-Ukraine, do not have the same effect in the future.

  Q113 Dr Whitehead: Within NPS 5, on the electricity networks infrastructure, there certainly seems at first sight to be a constraint on the extent to which it may be possible to achieve sufficient guidance from the document to bring forward strategic transmission capacity ahead of the projects that may want to connect to it. The guidance is normally that an application is based on a combined project and infrastructure, and I think that there are only one and a half paragraphs of alternative guidance under particular circumstances where transmission may be in place without a project attached to it. Do you think that that means that the whole purpose of bringing forward transmission capacity ahead of plant could be thwarted by the document?

  Charles Hendry: I think we were right to separate out the two areas, and I will ask Anne to comment further on that. There are certain areas where the National Grid, for example, is keen to put in place the infrastructure, not on a speculative basis, but ahead of where the development is going to be. If it is not going to be a particularly long project to build, the National Grid then knows that it can get its power to market at the end of it. But on something like a nuclear plant, we also thought that it was clear that some of the nuclear operators would be keen to receive consent for their plant, and sort out the complexities over that, separate from the National Grid connections, so seeing them as two separate elements in that process. Anne, perhaps you could comment further.

  Anne Stuart: Certainly, it was not our aim to prevent bringing forward effectively stand-alone headlines, if they are needed, as you say, for a strategic thing. Possibly, the emphasis on that aspect is more in the EN-1 in the need case, where we are talking about the need for the strategic routes that will pick up some of the things that are coming off the new nuclear power stations—not the immediate wire from the plant, but the deep reinforcements that are necessary. We would see that as being where the justification for the need for the plant comes. Once you've said that is the need, of course, the considerations for building a line will be very similar whether it is connected to an individual project or whether it is a strategic upgrade of some kind because you will still be looking at the landscape impacts, the impacts on ecology, the nearness to areas of outstanding natural beauty or whatever. So we wouldn't see most of the pure planning considerations as being particularly different if the need for that line is established.

  Q114 Dr Whitehead: But do you accept at the same time that because the document prioritises joint applications and puts very specific requirements on stand-alone applications, that may well shape a future centralised system, when clearly many people regard the need for an increasingly decentralised energy grid system as paramount in terms of the different forms of energy that will come on to the grid?

  Anne Stuart: We hope that we wouldn't be preventing that. Obviously we have as much of an interest as anybody in bringing forward that new grid that we need. I keep being told that you mustn't talk about smart grid. It must be smarter grid now, apparently. I am not sure why. But we certainly are not aiming to prevent that. It is more that there is an obvious need to connect a nuclear power station to the grid and it is making it clear that where there isn't that obvious "It's over there, it needs to be connected to here" need, there is still a provision for lines to come forward, either separate to the application that has already taken place or completely independently.

  Q115 Dr Whitehead: Do you think, however, that in terms of those considerations—the question of strategic network strength in the new lines and the question of the relationship with the infrastructural plant to each other—a national spatial planning framework is now rather important? In your response to the last scrutiny of the previous planning statements, you said that you were considering how best to take forward the Government's plans for "a simple and consolidated national planning framework covering all forms of development." Is that under way at the moment? When might we expect that work to be complete?

  Charles Hendry: A national spatial strategy for all types of generation?

  Q116 Dr Whitehead: Yes. I am merely rehearsing what you said.

  Charles Hendry: For nuclear there clearly had to be a spatial dimension and there were sites which were keen to be considered and we felt that in terms of the process moving forward it was better to have a spatial approach for nuclear. We haven't gone for a spatial approach for the other technologies. We are concerned about the blight that that might bring. If we identified and zoned part of the country in terms of where onshore wind would be appropriate, colleagues would for ever be saying, "Please lift that because housing in that area has been blighted." We haven't gone for a spatial approach in that respect.

  Q117 Dr Whitehead: So when you say the Government are considering how best to take forward their plans for "a simple and consolidated national planning framework" your consideration has resulted in not taking it forward?

  Anne Stuart: This is the difference between what we are doing for the energy NPSs and the fact that more centrally Government are working on the national planning framework. Having said that, I don't have a date for when that will be prepared. I know a lot of work is going on on it. I would not expect it to be a spatial strategy of the type we are talking about with nuclear which says, "There are places here where you need things. There are places there where they are not suitable." It is more likely to be something overarching that would stand above the NPSs rather than something that would add additional spatial detail to them.

  Q118 Dr Whitehead: But do you not think that the fact that we have all this new capacity of different kinds coming on stream over the following years—we know offshore, for example, requires different forms of grid connection—means that that kind of interactive, interdependent strategy may be very important in relating the plants to the lines and the strength of them? Minister, you mentioned, I thought very interestingly, the identification of a number of lochs which we could pump water up, so they would be sort of loch Dinorwigs. That requires new transmission, probably in advance of that coming on stream. That is the sort of issue which, presumably, would be part of a strategic spatial planning framework associated with these transmission concerns.

  Sir Robert Smith: If it was in England.

  Dr Whitehead: Certainly, yes. I accept that.

  Charles Hendry: Certainly it needs to be strategic. The national grid's estimate of the £32 billion for the infrastructure element which is going to be necessary starts to give an indication of the scale of the challenge. I think we have to recognise that where we have been generating electricity in the past is not where we're going to be generating it in future. Once there were historic coal-burning facilities where the coal resources were, or next to big industrial centres; we're now going to be seeing plants developed where the new resource is available. Carbon capture and storage will be coastal, nuclear will be coastal and offshore, and onshore wind will clearly be where the wind resource is best. We're going to have to have a different system for putting in place the grid network which will respond to that.

  I think, as part of that process, we've got to have a system which appeals to investors. Investors need to know that when they build their application, they will be able to get their power to market, but we also has to have a strategic overview. We don't want to have a situation where unnecessary collections are being required because of short-term thinking about, for example, where an offshore wind application comes onshore. There's already controversy about the connection facility to the national grid onshore, but also, if every single one came to shore at its closest point, point to point, the national grid would be required to spend billions on onshore connections which would be extremely costly—unnecessarily so—and extremely controversial and unpopular. Having that strategic approach, as well, is going to be part of that, and a wide net even further offshore, looking at key connections to Norway and elsewhere, which I think enhances our energy security and also provides us with ways of backing up the demand when the supply may not be there.

  Q119 Sir Robert Smith: On the nuclear changes you've made, you're now assuming that a geological storage and disposal facility will be available by 2130. That still means that some of the earlier nuclear power stations, if they go ahead, will have 110 years of storage on site. Would you still agree that that's not really interim?

  Charles Hendry: We have changed the approach on this, because I think we recognise that the concept of 100 years-plus is not what most of us would consider to be interim. We have recognised, and the national policy statements cover the fact, that a nuclear plant must look at the storage facilities on site. We have reduced the time span for that based on evidence given to us by the Nuclear Decommissioning Authority, which now believes it doesn't need to be left on site to cool for as long as it had previously suggested. Therefore, that brings that period down from 100-plus years to perhaps 50 years for the cooling process.

  The approach which has been taken has been to assume that all of the legacy waste would be put into a deep geological disposal facility first, and then the waste from the new plant would come in. Therefore, it requires that sort of time scale to be in place to happen. To correct you, I think our assessment is that 2040 is when it would be available if things move forward, rather than 2030.

  Q120 Sir Robert Smith: Or 2130. Which century?

  Hergen Haye: The plan is that the repository will be operational from 2040, but as the Minister said, at that stage, it will then receive waste from existing plants. You're absolutely correct that under the current timetable and given current policies, the earliest for the repository to receive waste from new build would be approximately 2130.

  Q121 Sir Robert Smith: For the sake of these NPSs, for a new nuclear power station, you are looking at 2130 before you see that site losing its waste?

  Charles Hendry: Indeed, which would probably be beyond the lifetime of the plant, so that has to be built into the design process. It is talking to the companies involved as well, and the volume of waste is now significantly less than was historically the case. It believes that, without question, it is a manageable process.

  Q122 Sir Robert Smith: When we were looking at it, the IPC said that it could refuse a development on the basis of local impacts. If a recommendation goes to the Secretary of State that the local impacts mean a site should be refused, could the Secretary of State overturn that?

  Charles Hendry: Anne may wish to comment further, but my understanding is that the Secretary of State will take a view based on the evidence and the recommendation that is given to him.

  Anne Stuart: The Secretary of State would certainly not be purely rubber-stamping the decision placed in front of him; he would be making a real decision. Having said that, I think that if he wished to depart from the recommendation he would have to give reasons for doing so, so that it wouldn't be purely on a whim.

  Q123 Sir Robert Smith: Finally, will you publish a timetable for developing the road map for a safe geological disposal site?

  Charles Hendry: We're taking that forward, and we've set up a geological disposal implementation board of which I am the chair and which met for the first time this morning. The board will look at what is necessary to take this to the next stage. We are very committed to the approach of the previous Government, who took a voluntarist approach to finding a community prepared to host this. That, inevitably, is a gentle process. There have been three expressions of interest from within Cumbria—two from district councils and one from the county council—and we are taking those forward. From their perspective, I think they see this as being part of a nuclear renaissance. It isn't simply a facility for looking after the historical waste from the nuclear programme; they also want to see a nuclear renaissance in west Cumbria. We are keen to take that work forward more rapidly, because I understand why colleagues here and others outside want to know where the site will be and when it will be operational. So it is a gentle process for moving it forward, but we recognise the need to move it faster.

  Chair: Thank you very much indeed. This has been a very helpful session, and we are grateful to you for coming in. We look forward to seeing you again soon.

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Prepared 26 January 2011